In its latest filing updating state regulators on how much the Coastal Virginia Offshore Wind (CVOW) project will cost customers, Dominion Energy asked to change how they calculate which customers have to pay more to cover the tab, which they said would save residential ratepayers nearly $1 each month.
The utility’s calculations, however, don’t match up with the State Corporation Commission’s proposed methodology.
The project, slated to bring 2,700 megawatts of power onto the grid once it is fully operational, started generating power in March despite some delays due to federal stop orders. It is reportedly about 75% complete and its total cost is projected to be $11.5 billion.
The cost of the project has ballooned from its original price of just under $10 billion, due to the work pauses earlier this year and tariffs levied by the administration of President Donald Trump. The U.S. Supreme Court found those charges unconstitutional and there are efforts underway to recoup that money.
The State Corporation Commission placed a cap on how much of the project’s cost can be passed onto customers in 2022. Right now, customers pay about $11 per month for the project as part of their monthly Dominion bill, and ratepayers will cover 100% of the cost of the project up to $10.3 billion.
Once the cost hits $11.3 billion, customers are only responsible for paying 50% of the project. Anything beyond that, up to $13.7 billion, is Dominion’s responsibility to cover, according to the terms of the utility’s agreement with the State Corporation Commission.
The company wants to change how they are splitting the cost of the project among the different rate classes for residential, industrial, and commercial customers. Their new methodology would mean a 90-cent decrease per month for the average residential customer. This would bring that portion of monthly bills down to $10.33.
“The Company’s proposal better aligns the allocation determinants and the billing determinants, meaning that the rates charged to customers will better reflect the costs those customers cause to be incurred,” Dominion representative Alan Givens said in the case testimony filed on April 22.
SCC staff stated in filed testimony that they support Dominion’s method of calculating the cost shift through forecasted customer growth, but not for how the company projects operational costs and the actual costs incurred. They suggested using their proposed method on a temporary basis to correct alignment between allocation of costs and benefits of the project.
Regulators’ calculations would mean an increase of about a dollar to residential customer bills – bringing the monthly portion of electricity bills up to $12.33.
The commission will have to weigh the different cost allocation calculation methodologies to make a final rule for the final cost to customers via a monthly bill rider, starting in September.
